This is normal. The game client caches a lot of information - the UI, map geometry and all it's models, monsters, npcs, as well as players and their armor, weapons, costumes, mounts, pets, and even skill visual effects.
Map and monsters get cleared whenever you move map but all player related models and effects are still cached which is why you see an increase in RAM usage whilst playing. It's quite expensive to load all the models and textures, so caching them keeps the game as smooth as possible. You have probably noticed the slight delay when running around and getting near a player you haven't seen before - it's where their item models and textures are loaded from your hard drive. If it wasn't cached this would happen every time you got near a player which would be bad.
Until recently, monsters models were cached in the same way and you could easily hit 2GB RAM usage in no time at all. I modified the system so they get cleared when you move map, since monsters are rarely reused on other maps so there is not much point caching their models in the same way as players.
I also optimized a lot of the UI and game model textures to reduce RAM and VRAM requirements but the game has grown considerably since it was first released and the requirements have increased with it. It does state quite clearly on the download page under requirements that the game requires 1.5-2GB of free RAM. It can of course be played with less but the experience will not be great as Windows will need to swap to hard drive and that slows everything down considerably.